Question

The following costs relate to Tower Company: Variable manufacturing cost, $36; variable selling and administrative cost, $14; applied fixed manufacturing overhead, $21; and allocated fixed selling and administrative cost, $10. If Tower uses absorption manufacturing-cost pricing formulas, the company's markup percentage would be computed on the basis of:

Answer 1

$71

Step-by-step explanation:

The computation of cost per unit using absorption costing is given below:-

Manufacturing cost per unit = Variable manufacturing cost + Fixed manufacturing overhead

= $43 + $28

= $71

Therefore for computing the manufacturing cost per unit we simply added the variable manufacturing cost with fixed manufacturing overhead and rest cost are not relevant for manufacturing cost per unit.